TAIWAN Law and Practice Contributed by: Robin Chang, Ken-Ying Tseng and Eddie Hsiung, Lee and Li, Attorneys-at-Law
al Evaluation Committee reaffirmed Taiwan’s “regular follow-up” status. This unanimous decision by APG members, prompted by Taiwan’s 2023 follow-up report, maintains the country’s standing in this top- tier category since its initial 2019 mutual evaluation. It is worth noting that the forthcoming VASP-specific law will include a section on stablecoins, at which point the Central Bank will also play a role. 2.2 Crypto-Asset Regulatory Frameworks In Taiwan, the primary distinction regarding the char- acterisation of digital assets is between tokens hav- ing the nature of securities (ie, security tokens) and tokens without the nature of securities (ie, non-secu- rity tokens). Security Tokens Under the current regulatory framework in Taiwan, tokens that meet the existing legal definition of “secu- rities” as set forth in the Securities and Exchange Act are subject to the full scope of regulatory oversight administered by the FSC. In order to provide a struc- tured and compliant environment for such tokens, the FSC has delegated authority to the Taipei Exchange (TPEx) to develop and enforce detailed rules and requirements governing both the issuance and sec- ondary trading of security tokens. These regulations are designed to ensure investor protection, market transparency, and regulatory compliance. Due to the rather high regulatory thresholds and associated com- pliance burdens, market participation has remained limited. To date, there has been only one officially approved security token issuance programme in Taiwan, highlighting the cautious and controlled approach taken by regulators toward this emerging In Taiwan, digital assets that are not deemed securities are regulated under MLCA. Following the amendment to MCLA in 2024, a VASP is required to register with the FSC in accordance with the relevant provisions of the MCLA before commencing operations. Operating without such registration may result in criminal liability. Many then-existing market participants had accord- ingly applied for registration with the FSC under the new legal framework. As of beginning of May 2026, form of digital asset. Non-Security Tokens
there are eight registered VASPs. Also, pursuant to the Regulations Governing Anti-Money Laundering and Countering the Financing of Terrorism for Enterprises of Virtual Currency Platforms and Trading Business (the “VASP AML Regulations”), a duly registered VASP is required to: • establish internal control and audit mechanisms; • implement know-your-customer (KYC) procedures; • maintain records; • conduct continuous monitoring; and • report large-amount transactions and suspicious transactions. Furthermore, in April 2026, the Executive Yuan (cabi- net of Taiwan) announced the draft of specific law dedicated to virtual assets, namely Virtual Assets Service Act, which proposes a licensing regime for VASPs. It remains uncertain when the Legislative Yuan (the congress) will pass this Act. 2.3 Regulated Firms and Legal Wrappers According to current Taiwan laws and regulations, licensed asset management companies (ie, securities investment trust enterprise and futures trust enterpris- es) are prohibited from investing in cryptocurrencies. 2.4 Token Issuance Security Token Offerings (STOs) Since 2020, the Financial Supervisory Commission (FSC) and the Taipei Exchange (TPEx) have imple- mented a specialised framework for tokens classified as securities. • Fundraising Thresholds: (a) under TWD30 million – issuances can proceed directly under standard STO regulations; and (b) over TWD30 million – the issuer must first enter the regulatory sandbox for evaluation before proceeding. • Issuer Eligibility – only Taiwanese companies limited by shares that are not listed on the TWSE, TPEx, or the Emerging Stock Market may issue STOs. Foreign entities are currently prohibited from acting as issuers. • Token Characteristics – authorised tokens are restricted to debt-based or profit-sharing struc-
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